Subject:
workplace reform.
E&OE...
PRIME MINISTER:
...Econtech report that's come out this morning. Now Econtech which is run by Chris Murphy, one of the most respected independent economists in Canberra, he's been around for many years and he's given independent economic advice to a lot of people so any suggestion that this is some kind of Government or Liberal Party set up is completely absurd. He wouldn't lend his name to anything other than a rigorous piece of economic analysis. What this report has done is to demonstrate an argument I've been making for many months and that is Labor's industrial relations policy would in time lead to higher interest rates because it would reintroduce a more centralised approach to industrial relations. That would put pressure on wages and through that higher inflation, would lead to higher interest rates. The report also prophesies that the dismantling of our industrial relations system would reverse the fall in unemployment. It quotes a figure of some 300,000 people who might over time be made unemployed as a result of reversing our industrial relations changes.
There can be no argument that our industrial relations changes have added to the fall in unemployment. It's been one of the elements in the fall in unemployment and any reversal of our industrial relations policies, particularly the reintroduction of the unfair dismissal laws, would be bad news for the employment prospects of this country. The worst thing we can be doing at the moment is dismantling industrial relations reform and bear in mind that my opponent Mr Rudd has no plan of his own for Australia's economic future. He either mimics the Government, agrees with the Government or alternatively in industrial relations he does what the ACTU wants him to do and any reversal of industrial relations according to Econtech would lead to higher unemployment and higher interest rates and the figure for interest rates quoted by this respected economist is 1.4 per cent.
JOURNALIST:
Wouldn't falling employment ease pressure on interest rates?
PRIME MINISTER:
Depends on the industrial relations system. If you have an industrial relations system like the one we have now you can simultaneously have relatively low interest rates and low unemployment but if you change the industrial relations system we now have and reintroduce a system whereby firms will be forced to pay wage increases they can't afford, that process will be reversed.
JOURNALIST:
But the Econtech report says wages would fall?
PRIME MINISTER:
Well wages would be affected in different ways by other changes to the industrial relations system, but the cumulative impact according to Econtech, if you're quoting it, is both a fall in unemployment...both a rise in unemployment and also a rise in interest rates.
JOURNALIST:
Can you understand that the public might be a sceptical given that there have been four interest rate rises since the legislation was introduced?
PRIME MINISTER:
Well my argument is simply this, that if you have a Labor Government you will have higher interest rates and here you have an independent source supporting that argument. I mean, nobody likes increases in interest rates, but what Econtech is saying is that if you change the industrial relations policy one of the results of that will be an increase over time in interest rates and they have put a figure of 1.4 per cent on it. That's not my figure, that's the figure of an independent economic analyst. Thank you.
[ends]